The Federal Government announced yesterday significant changes to the proposed superannuation reforms, providing clarity and certainty for financial planners and clients around Superannuation.
The news that the retrospective $500,000 lifetime non-concessional cap has been removed has been well received by the superannuation industry and creates opportunities for clients to make additional non-concessional contributions to their fund in this current financial year.
Below are the key proposals:
*The $500,000 lifetime Non Concessional Contributions (NCC) Cap has been dropped.
*The Government has instead announced a reduction of the current annual NCC Cap from $180,000 to $100,000 from 1 July 2017. This will mean your clients can continue to contribute NCCs of up to $180K, and use the bring forward to $540,000 in the 2016/17 financial year. The 3-year bring forward provisions will remain as per the current provisions based on the lower cap. No NCC contributions will be allowed once the proposed $1.6Million transfer cap has been reached.
*The reduction to a $25,000 NCC cap will remain in place and commence from 1 July 2017.
*The concessional contribution catch up provisions have been delayed and will now not commence until the 2019/2020 financial year.
*The Government has confirmed that Division 293 tax on Super will be reduced to individuals with salaries above $250,000 p.a.
The government has changed their mind on the removal of the work test for those aged over 65.
Please do not hesitate to contact your TWD Adviser for more information on how these changes may affect your personal situation. twd.com.au